Natural Gas Pipeline Company Of America

Seventh Revised Volume No. 1

Effective Date: 04/18/2008, Docket: RP08-319-000, Status: Effective

Original Sheet No. 495 Original Sheet No. 495 : Pending

GENERAL TERMS AND CONDITIONS

----------------------------

(3) Pricing Differential Costs shall apply in instances

where Natural is unable to reach a negotiated resolution with a supplier

at reasonable cost and Natural concludes that auction of the contract may

not reduce costs. In such cases, Supply Realignment Costs shall be

determined pursuant to a "pricing differential" method and shall reflect

the difference (which may be positive or negative) between the price at

which Natural sells the gas at auction or, if an auction is not utilized,

the greater of the price at which Natural actually sells the gas or the

market price of gas for the period in question, as determined by reference

to published spot price indices in general use in the industry and

applicable to Natural's system, and the price Natural is obligated to pay

the supplier, times the volume of gas Natural takes from such supplier

over the period in question. Such costs shall also reflect any out-of-

period adjustments relating to contracts treated on a pricing differential

basis if such adjustments relate to periods subsequent to November 30,

1993. Natural has provided the Commission as part of its first tracking

filing under this Section 38: (i) a List A of all contracts to be handled

initially under the pricing differential method; (ii) an initial List B of

all below market contracts; and (iii) a specification of the applicable

indices and other factors used in determining the price differential. Such

sales are to be made consistent with Section 34 of these General Terms and

Conditions. Natural may continue to use the pricing differential method to

determine Supply Realignment Costs for auctions held or sales made during

the period through November 30, 1997; provided, however, that Natural may

continue to use the pricing differential method to determine Supply

Realignment Costs associated with one remaining gas supply contract, as

reflected in its filing with the Commission to revise this Section 38 made

on August 26, 1997, until December 31, 2000, or any earlier date on which

such contract is terminated. Natural will advise the Commission within

thirty (30) days in the event that the parties to this contract agree to

any substantive change in its terms and conditions. The pricing

differential method shall also apply to Coal Gas as provided in Section

38.8 of these General Terms and Conditions.

(b) ASSESSABLE SHIPPER

For purposes of this Section, Assessable Shipper shall

mean any Shipper receiving Assessable Transportation Services.

Assessable Transportation Services shall mean all firm

transportation services under Rate Schedule FTS or FFTS (and Rate